2002-08-22 04:00:00 PDT Sacramento -- A nasty power struggle between two Peninsula lawmakers ended Wednesday when an Assembly committee approved landmark consumer-privacy protections, but not before five hours of backroom maneuvering and the addition of an amendment to weaken the measure.

Despite the drama, the Legislature appears close to sending Gov. Gray Davis a bill that would give California the toughest privacy law in the nation. The amendment, added by Republicans, is expected to be removed today in another committee, and Speier announced she had picked up surprise support from her first Republican, Assemblyman Rod Pacheco of Riverside.

"There is every reason to believe that financial privacy protections will be available to California consumers," Speier said, clearly relieved after a drawn-out day, "if we can get the governor to sign it."

Davis has not taken a position on Speier's bill, but he called for financial privacy protections last January. Banks and insurance companies that oppose the measure have flooded him with more than $100,000 in campaign contributions in recent weeks.

The Speier measure would allow consumers to block the sharing of private financial information -- such as bank balances, debts and spending habits -- among the networks of companies that keep vast databanks of personal information on customers.

It would essentially cut off corporations from selling private information to outside telemarketing firms and shutting down, for customers that request it, the unfettered flow of information shared within large conglomerates such as Bank of America and Citibank.

For a few hours, Speier's biggest roadblock was Assemblyman Lou Papan, D- Millbrae, chairman of the Democrat-dominated banking committee. Papan has been openly hostile to Speier ever since she refused to support his daughter's Assembly candidacy earlier this year.

BACKROOM BACK AND FORTH

Despite attempts to weaken the measure in Papan's committee, it became clear Wednesday that Democratic leaders have blessed Speier's bill in its stronger form, if only behind the scenes, meaning the measure has a good chance of passing before the Legislature adjourns Aug. 31.

During the hearing, Senate President Pro Tem John Burton, D-San Francisco, made a showy entrance into the committee room, walked in front of the dais and waved Papan into a side hallway. "I wanted to make sure he knew how important this bill was to us," Burton said later.

Papan and two moderate Democrats voted to approve an amendment offered by GOP lawmakers to essentially gut a key portion of Speier's measure -- shocking Speier and her supporters and sending them scrambling for help from higher authorities.

As lobbyists droned on about the bill, Papan was called to the office of Assembly Speaker Herb Wesson, D-Los Angeles, where he was asked to take the hostile amendment out. He refused, saying a fair vote was taken.

The Assembly leadership nevertheless agreed in private that the measure would be changed back to its stronger, original form when it gets heard today in the Assembly Judiciary Committee. It will not return to Papan's committee.

The measure, SB773, passed the Banking and Finance Committee on an 8-4 vote,

with Papan the only Democrat declining to vote. The bill was put over the top and approved because of support from Assemblymen Ed Chavez, D-La Puente (Los Angeles County), and Lou Correa, D-Anaheim, two moderate Democrats who also supported the hostile Republican amendment.

"I felt the bill needed a considerable amount of cleaning up, and I wasn't given a chance to do that," Papan said after the vote, adding that he believes the bill will be sent to Davis. "Whether it's a good law or not, that question remains. I expect a lot of lawsuits on the bill, a lot of them."

Speier still faces a battle in the full Assembly, where she must pick up at least five votes from wavering members in order to be successful. The bill died in the Assembly last September after a group of pro-business Democrats refused to support it.

Papan began the hearing by saying that Speier had made 200 changes to the bill since last September and that "it's too easy to exploit the public's fears on privacy."

"Despite allegations made by certain members and inaccurately reported in the media," said Papan, "no one was bought off by a specific industry or special interest. Such allegations are totally degrading to the process."

The GOP amendment would have allowed affiliated companies within a large banking conglomerate to share information about customers without any roadblocks. Banks argued that they need to have easy access to information so they can, for example, offer their checking account customers a home loan.

ALL IN THE FAMILY

Financial companies say they agree that consumers should be allowed to protect themselves from unwanted marketing and unscrupulous telemarketers, but they don't understand why Speier wants to make it illegal to simply share information within a family of companies.

At one point, Speier said she recently got a notice advertising the new State Farm Bank, which she got because she is a State Farm Insurance customer.

"Outrageous!" a financial industry lobbyist muttered behind her back in mock horror.

"At the end of the day, you have to think about serving your customer, and everyone wants to do that," said another lobbyist, James Clark with the California Bankers Association. "We have a vested interest in making sure our customers are comfortable with the range of activities we perform."

Legislative highlights

With the Legislature scheduled to adjourn its two-year session at midnight Aug. 31, lawmakers are working to finish more than 1,000 bills. Here are some significant actions taken this week:

-- Driver's license: A bill that would allow undocumented immigrants who have applied for legal status and who fulfill all other requirements to apply for driver's licenses. Gov. Gray Davis had persuaded Assemblyman Gil Cedillo, D-Los Angeles, the bill's author, to hold it for the past several months after it was passed by the Assembly. But Cedillo sent the governor the bill Tuesday with plans for another bill that would address some of Davis' concerns. (AB60, Cedillo)

-- Cellular spam: The Assembly sent Davis a measure prohibiting advertising "spam" text messages transmitted to cell phones by marketing companies. The bill has never received a "no" vote in the Legislature. (AB1769, Assemblyman Tim Leslie)

-- Inheritance: The Senate voted 22-13 to allow surviving domestic partners to inherit property. Under the bill, the property of a registered domestic partner who died without a will would go to the other partner. (AB2216, Assemblyman Fred Keeley)

-- Tenant rights: A bill that could prevent landlord-tenant fights over the return of tenant security deposits was approved by the Senate 21-13. The bill would allow tenants to ask for inspections up to two weeks before they vacate, allowing time to fix minor repairs. (AB2330, Assemblywoman Carole Migden)

-- Patient privacy: The Senate approved 26 to 12 a bill that would prohibit drug companies from disclosing medical information about a patient in most instances without the patient's approval. Drug companies would fall under the same rules as doctors, pharmacists and health insurance companies. (AB2191, Migden)